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Bad Credit

What it is and how it works



In 2018, FICO, Experian and Finicity launched the new UltraFICO score. The goal of UltraFICO is to expand credit access and give consumers more control in the credit scoring process, and it considers more factors that can help nontraditional borrowers get the credit they deserve.

a woman sitting at a table using a laptop: UltraFICO

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If you feel like traditional credit scores don’t apply to you and you wonder if the UltraFICO score might help you get the credit you need, keep reading to learn more.


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What is UltraFICO?

At its core, the UltraFICO score is just another credit score. However, the way this newer score is determined aims to expand credit access to consumers who may have had trouble achieving a regular FICO credit score in the past.

According to updated information from the Fair Isaac Corporation (FICO), the UltraFICO may be especially relevant to consumers whose credit scores typically fall right under a lender’s cut off range, or those with traditional credit scores in the high 500s or low 600s. This can include consumers who are new to credit and have a limited credit history, but it can also include those who may have made credit mistakes in the past.

“This changes the whole dynamic of the lender and customer relationship,” said Jim Wehmann, executive vice president of Scores at FICO in a news release. Wehmann went on to say that the score “empowers consumers to have greater control over the information that is being used in making credit risk decisions” while enabling “a deeper dialogue between the consumer and lenders to help both parties make better financial decisions.”

How does UltraFICO work?

Where the traditional FICO scoring model considers five main factors-payment history (35 percent), amounts owed (30 percent), length of credit history (15 percent), new credit (10 percent) and credit mix (10 percent)-to come up with your FICO score, the UltraFICO considers a range of details normally overlooked by traditional scoring methods. This includes your banking information, which can be used to show a positive history of money management.

Specifically, UltraFICO scores take several banking factors into consideration, including:

  • The length of time your bank accounts have been open
  • Frequency of your banking transactions
  • How recently you’ve made banking transactions
  • Evidence you frequently have cash on hand
  • History of positive account balances

If you don’t have traditional credit reporting from loans or credit cards, it’s easy to see how the UltraFICO score could benefit you. After all, this score lets you use your checking and savings account information to show you maintain a balance in your accounts, and that you’re making regular banking transactions, like deposits and bill payments.

According to FICO, 70 percent of U.S. consumers with “sound financial behavior” in their checking and savings accounts would receive an UltraFICO score that is higher than their regular FICO credit score.

Who should opt into UltraFICO?

Consumers who have a low FICO score, or no credit score at all, should consider utilizing the UltraFICO score. Fortunately, applying to receive an UltraFICO score when one becomes available is a simple process. All you have to do is head to the UltraFICO website and enter some basic contact information like your name, your email address and your phone number.

What’s the difference between UltraFICO and Experian Boost?

If you’re trying to find ways to show a higher credit score, you can also look into a product called Experian Boost, which calculates credit scores using the FICO 8 credit scoring model. Using Experian Boost is free, and you should be able to use this program to show a better score in a short amount of time.

While Experian Boost isn’t a type of credit score per se, this program lets you receive credit reporting on nontraditional bills, like phone and utility bills. You also receive free credit monitoring and credit alerts when you sign up.

How to improve your credit score

Applying for an UltraFICO score may help you qualify for the credit you need, but there are other ways you can boost your credit history so you can show better credit using traditional scoring models. While building credit can take time, the best ways to improve your credit score include paying your bills on time and avoiding situations where you’re maxing out credit on revolving credit accounts. Also make sure you don’t open or close too many accounts, and that you keep older accounts open since they help you increase the average length of your credit history.

Another step you can take is figuring out whether you can improve your credit mix, which is a factor that considers the different types of credit you have. If you want the chance to build credit in a new way, for example, you can always start out with a credit card for bad credit or a secured credit card that requires a cash deposit as collateral. While putting down a deposit doesn’t sound ideal, secured credit cards are easy to get approved for, and they help you build credit since your payments are reported to the three credit bureaus.

The bottom line

The UltraFICO credit score is newer on the scene, but it stands to help consumers who have had trouble building traditional credit but are otherwise trustworthy when it comes to paying their bills. Consider signing up for this score if you think it might help you qualify for the credit you need, but also look for ways to build credit using traditional methods. With enough positive history and responsible use of the financial tools available to you, you’ll eventually build the credit you need to live the life you want.

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Bad Credit

Is There a Difference Between No Credit and Bad Credit?



The short answer is yes, and understanding the difference could be instrumental in getting better credit.

No credit and bad credit often get grouped together. It’s understandable why, as they both sound similar enough. And if you have either, the next step forward is to focus on improving your credit.

The two situations aren’t the same, though. It’s important to know the difference, because the right way to build your credit often depends on whether you have no credit history or bad credit.

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The difference between no credit and bad credit

Having no credit means that there’s not enough information on your credit file to calculate a credit score for you. It’s also known as being credit invisible. Sadly, this is an issue that affects millions of Americans.

There aren’t any problems on your credit file; the credit bureaus just don’t have enough data on you. That means when a lender or any other third party checks your credit, there’s nothing to go on.

Meanwhile, “bad credit” is a common term used to describe a low credit score. That low score is because of negative items on your credit file, such as not paying your credit card bill.

When you have no credit, the solution is to build your credit. When you have a low credit score, the solution is to rebuild your credit. Now, let’s look at how you can do each one.

How to build credit for the first time

Here’s the simplest way to build credit:

  • Open a credit card.
  • Use the credit card for at least one purchase per month.
  • Always pay your credit card bill on time and in full.

It’s that easy; that’s all you need to do to get a good credit score. When you use a credit card and pay the bill on time, you establish a positive payment history. That’s the biggest credit scoring criteria.

The tricky part when you have no credit is finding a credit card you can qualify for. Secured credit cards are one of the most common options for consumers in this situation. You pay a security deposit for this type of card, so it’s possible to open a secured card even if you have no credit.

If you’re in college, credit cards for students are available. These are often an option for applicants without any credit history.

How to rebuild a low credit score

It’s a little more complicated to rebuild your credit. First, you need to find out what negative items are affecting your credit score. Here’s how to start:

  • Use an online credit score tool to check your score and learn about any items damaging your credit. If you have a credit card, there may be a credit score tool in your online account. If not, there are plenty of free ways to get your credit score.
  • Request your credit report from the three consumer credit bureaus (Equifax, Experian, and TransUnion). You can pull a free annual credit report from each bureau, and through April 2022, you can get free weekly credit reports. Your credit report will show you exactly what’s affecting your credit.

Once you know what’s affecting your credit, you can work on correcting it. Below are a few of the most common issues and how to fix them.

Problems with your payment history

This includes anything related to not paying a bill on time, from late payments to having accounts go to collections.

The first step is catching up on your payments. If you can’t pay in full, contact your creditors and see if you can set up a payment plan with them. They may be willing to work with you if that means you’ll be making regular payments.

Next is rebuilding your payment history. The easiest option is to use a credit card at least once per month and pay in full by the due date. Why do you need to use a credit card? Credit card companies report on-time payments to the credit bureaus, which helps your credit score. With other types of bills, your on-time payments typically don’t get reported to the credit bureaus. That means you may not be able to improve your payment history with rent, utilities, or other monthly bills.

If you already have credit cards, you can continue using them to rebuild your payment history. If you don’t, look for secured credit cards and apply for one you like.

Using too much of your credit

A big factor in your credit score is your credit utilization ratio — your credit card balances divided by your credit limits. If this number gets too high, it can lower your credit score. The standard recommendation is a credit utilization ratio of under 30%.

Let’s say you have one credit card with a $4,000 balance and a $5,000 credit limit. That would put your credit utilization at 80% ($4,000 divided by $5,000 is 80%), a very high number that would decrease your credit score.

Fortunately, only your current credit utilization matters. Once you pay down your credit card balance, your credit score will bounce back.

Errors on your credit history

A low credit score may be due to an error and not any action on your part. This is why it’s so important to pull your credit reports from each credit bureau. By reviewing those, you can see if there are any mistakes.

If there are errors on your credit report, you can go to the credit bureau’s website to dispute them online and get them removed.

A low credit score and a nonexistent credit score are both things you can change. After you determine exactly what the issue is, you’ll be able to choose the best solution to fix it.

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‘There is no new normal’: Worcester small business owner pivoted during COVID-19 and expects only more change after pandemic



It took about eight minutes for the bank to reject Natalie Rodriguez’s application for a loan through the Small Business Administration.

Rodriguez opened Nuestra, a Puerto Rican inspired restaurant in Worcester, in January of 2020. When COVID-19 arrived months later she discovered Nuestra wasn’t eligible for the federal or state funding that thousands of other establishments received.

To qualify, restaurants were required to show payroll and salary for years before 2020. Those figures didn’t exist for a restaurant that weren’t open in 2019.

“[I was] determined and knew that ‘no’ is not an OK answer,” Rodriguez said. “A door may close but you may need to kick down another door.”

Rodriguez then applied for conventional loans only to be led to more closed doors. Less than 10 minutes after applying for an Economic Injury Disaster Loan, she received notice that her poor credit score resulted in her application being denied.

Rodriguez used the dead end with the SBA to create a new path for herself and Nuestra.

She not only learned how to improve her credit but wanted to ensure others didn’t have to follow her journey as an entrepreneur.

Rodriguez extended the “Nuestra” brand to include financial advising. She started Nuestra Financial in April of 2020.

“Now I’m helping others. I’ve been able to restore my credit,” Rodriguez said. “I’ve been able to help others restore their credit and be able to help them make a business themselves if they so choose. I’ve been able to survive.”

Without grants and other funding, Rodriguez managed to keep her restaurant open through funds generated from Nuestra Financial.

“I was very quiet about it in the beginning. I didn’t want people to be like, ‘Oh look at this girl, she just opened a restaurant in the middle of a pandemic,’ and talk smack,” Rodriguez said. “About a month or two later, a light bulb hit and I was like, nobody pays my bills but me. I needed to mind my own business and not worry about what other people thought.”

In creating Nuestra Financial, Rodriguez said she’s helped Worcester residents restore their credit and purchase new vehicles and homes.

Rodriguez said financial literacy is rarely taught to children in school and wasn’t something she learned. When a situation arises like a rejection notice for an economic disaster loan, many don’t know how to respond or where to find answers.

Rodriguez said she’s helped young and old people, along with those who have bad credit or no credit.

“We lack the confidence, including myself, because we weren’t taught,” Rodriguez said. “So if you don’t know something, you weren’t taught, you’re not going to be confident about it.”

Coming out of the pandemic, Rodriguez remains confident about both her businesses. Nuestra, the restaurant, while closed for daily service continues to provide catering services. Rodriguez is still preparing what the future holds for the restaurant but plans to announce an update soon.

As masks start to become less a part of daily routines, Rodriguez, as a small business owner, doesn’t envision many differences from this year to last.

So many aspects of life remain uncertain from rising food costs to a potential third booster for vaccines and whether the country will ever reach herd immunity for COVID-19.

The pandemic arrived with Rodriguez immediately pivoting. As it approaches its potential end, Rodriguez will continue to do what helped her to navigate it.

“I feel like there is no new normal just yet,” Rodriguez said. “I think we’re all just trying to adjust and pivot at the same time and getting creative. I think it’s where we all are.”

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Columbus Mattress Wholesale moves to newer, larger Gahanna store



More than four years back, Cathryn Clark’s boyfriend, Christopher Robbins, was on the hunt for a new mattress. He just couldn’t find one at an affordable  price. 

Clark, 29, and Robbins, 34, who are now engaged, were living in Franklinton, where they still live today.

They had no experience owning or operating a small business; Robbins worked as a retail assistant for SAS Retail Services while Clark worked as the communications director for two Methodist churches. 

But in 2017, Robbins, with Clark at his side, took the leap and opened Columbus Mattress Wholesale on the West Side, with the goal of  helping low-income consumers secure mattresses and other bedtime products.  

“We really wanted to bring a store to people that, you know, they weren’t paying an arm and leg, but they still could get a good night’s sleep,” Clark said.

Customers at Columbus Mattress Wholesale can pay cash or credit, for example, but the business also works with financing companies that serve people without credit scores, with bad credit or who are lower income. 

Last month, the business made a big move. It expanded from its original location on Harrisburg Pike to a store double the size at 435 Agler Road in Gahanna.

Clark said she and Robbins saw a need in the broader area, with many of their customers coming from outside the Hilltop, such as Linden.

Nestled between Dollar Tree and the Ohio BMV in Gahanna, the new storefront opened Memorial Day weekend and sells mattresses, bed bases, bed frames and pillows. Mattress prices range from under $100 to more than $1,000, depending on the size and brand, which includes some well-known names such as Serta, Beautyrest and Casper.

Clark said while she and Robbins originally sold solely Ohio-based brands, they’ve branched out to national brands as business has grown.

Columbus Mattress Wholesale also offers free same-day delivery on most orders from customers living in Columbus. 

Clark does a little bit of everything for the business, from running communications, to working on the sales floor, to managing the sales team, to ordering what they sell. 

She said a big mission for herself and Robbins, beyond doing business, is aiding the community.

“We’ve seen a lot of people struggle,” Clark said.

Clark said she and Robbins work to mentor other people who are hoping to open or currently own a small business. She added that the store starts employees at $17 per hour.

She and Robbins haven’t decided yet what they will do with the original location — which is currently closed — but said they might shift it into an accessory store.

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